Pekao Posts Higher Quarterly Profit on Sale of Bond HoldingsMarta Waldoch
Bank Pekao SA, Poland’s second-largest bank and a unit of UniCredit SpA, said profit rose 5.3 percent in the second quarter after it sold a bond portfolio.
Net income increased to 741.8 million zloty ($233 million) from 704.2 million zloty a year earlier, the Warsaw-based bank said in a regulatory statement today. That exceeded the 647.8 million zloty average estimate of 12 analysts surveyed by Bloomberg. The bank booked 153 million zloty from a sale of securities, it said.
Record low interest rates and weak economic growth in the eastern European country are hurting Polish banks’ profit and forcing them to cut costs and seek revenue elsewhere. Chief Executive Officer Luigi Lovaglio told reporters in Warsaw he expects Pekao profit will fall less than 10 percent this year.
Pekao’s net interest margin dropped 0.2 percentage point to 3.4 percent at the end of June from a year earlier. The lender cut operating costs by 2.9 percent to 902.8 million zloty, while retail lending rose 8.5 percent in the same period.
Net interest income, the difference between what Pekao pays on deposits and charges for loans, fell 7.6 percent from a year earlier to 1.1 billion zloty. Fee income declined 1 percent to 573.4 million zloty.
Pekao fell 2.7 percent to 163 zloty by 1:30 p.m. in Warsaw trading. The shares climbed 7.5 percent in the past 12 months, compared with a 24 percent increase for the main Polish banking index and a 5.3 percent gain in the benchmark WIG20 index.